What you need to know about the property tax appeal deadline NEXT week in Sacramento

I’m not trying to be THAT guy by starting a business conversation during Thanksgiving, but this is important. Did you know the deadline to appeal property taxes in Sacramento County is on Monday? Since December 2, 2013 is the cutoff point, I’ve boiled down the process to three steps of what you need to know. Please pass this along to friends and clients.

Image-purchased-by-Sacramento-Appraisal-Blog-and-used-with-permission

Three Steps for Disputing Property Taxes in Sacramento County:

  1. Look up your assessed value here: Your assessed value listed at this link is supposed to be what your home was worth on January 1, 2013 (NOT today’s value). Does the value seem reasonable? If yes, don’t do anything. If not, go to Step 2. Keep in mind every $10,000 of assessment ends up costing you about $125 out of your pocket. This means if you are overassessed by $50,000, you’ll be overpaying about $625 this year in property taxes. This is good to consider so you can determine if it is worth your time and effort to move forward.
  2. Request a free informal review by the Assessor here: You can ask the Assessor to take a look at your assessed value for free. This is not an appeal, but only an informal review (also known as a “Prop 8 Decline in Value” form). If the Assessor responds to you at some point, great. But if they don’t agree with your opinion of value after the deadline to appeal has passed (even if you are right), you’re out luck since you didn’t formally appeal (Step 3). This step is better than nothing (and it’s free), but Step 3 is best.
  3. Image purchased at 123rf dot com and used with permission - 14688774_s - smallerFile a formal appeal: All you need to do is fill out the Application for Changed Assessment (PDF) (cost is $30) and turn it in before the deadline. Along with the application it’s best to provide some support for what your property was worth on January 1, 2013. Ideally you should provide a list of comparable sales around January 1, 2013 (NOT current sales) and write up a few sentences about how these sales compare to your property. Let’s be honest though, it is a busy week ahead, so if you don’t have time or ability to gather support in these next few days, just fill out the application anyway. The most important thing this late in the game is to get the application in. You can always provide support later (or hire someone like me to help you with that in the future if the Assessor sends you a letter about an appeals hearing). The main benefit of a formal appeal is that it entitles you to carry on the conversation with the Assessor if they disagree with your opinion of value. You do not have the right or power to keep the appeals conversation going when you only do Step 2.

Please let me know if you have any questions. I really understand how this process works, so I’ll be glad to answer any last-minute questions you might have.

Have a wonderful Thanksgiving. I hope it’s your best one ever.

Pro Tip: Don’t talk about property taxes at the Thanksgiving table.  🙂

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Client gets $220,000 reduction in assessed value

I got some great news recently for a client, so I wanted to share the bliss. This client hired me to help him get his property taxes in sync with the current market since his home in Carmichael was overassessed by over $200,000 (ouch). After I turned in my tax appeal report to the Assessment Appeals Board in Sacramento County, his assessed value was lowered by $222,574. This means he’ll be getting a $2,300+ refund check in the mail. Cha-ching.

lowered property taxes for a client - by sacramento tax appeals

There is so much confusion and dishonest information out there about the property tax appeals process. If you have any questions, you may want to read 5 Things to Know about 2013 Property Taxes (or watch the video below). Then be sure to look up your 2013 assessment on the Assessor’s website.

Question: What would you do with a $2,300 refund check? Comment below.

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5 things to know about 2013 property taxes

There are going to be many property owners in for a rude awakening come next week when they find out how much their property taxes increased. We all love it when real estate values go up, but one of the unfortunate byproducts is increased taxes – especially for those who had their property assessments lowered by the Assessor’s Office in recent years.

There is so much bad and dishonest conflicting information out there about property taxes in Sacramento County, so I want to help clear some of that up by giving accurate insight based on my expertise with the property tax appeals process.

Five things you should know about property taxes in 2013:

  1. Image-purchased-by-Sacramento-Appraisal-Blog-and-used-with-permissionWhen can you appeal? The formal period to dispute 2013 property taxes in Sacramento County will be open from July 2, 2013 to December 2, 2013.
  2. How can you find out your 2013 assessed value? You can look up your 2013 assessment here on the Assessor’s website in early July 2013. Keep in mind the assessed value is supposed to be based on January 1, 2013 (NOT the current market). If the value looks too high, then I recommend appealing if it makes enough sense for you. Every $10,000 of assessment equals about $100-125 out of your pocket, so it’s important to understand how much you are over-assessed to determine whether it’s worth it or not to pursue the appeals process. I usually recommend property owners to pursue an appeal if they are assessed more than $30,000 too high. The bulk of people I’ve assisted are usually assessed between $50,000 to $100,000 too high (my record was 1.5 million on a piece of land).
  3. Who will pay more in taxes this year? Since the market increased last year, mostly all property owners will have a typical 2% increase in taxes to account for inflation, but there will also be MANY property owners who have their taxes adjusted upward by 10-15% easily. The Assessor can only inflate taxes by basically 2% each year under normal circumstances, but for property owners who received a “Prop 8 temporary reduction” over the past several years, their property taxes can be raised any amount each year so long as it is not increased above the original “base-year value” (called the “Prop 13 value” – which is usually the original purchase price level from years ago). This essentially means many home owners will be paying hundreds of dollars more this year – and they didn’t even see it coming.
  4. image purchased from 123rf dot com and used with permission - Sacramento Appraisal Blog - smallerWhich form should you fill out? This confuses so many people, so read closely. There are actually two forms you can fill out during the appeals process. There is a free form called the “Prop 8 Decline in Value” form. It is NOT an appeal, but you might be able to get results still by asking the Assessor to review your property for free. If you do not hear back from the Assessor’s office by October though, I highly recommend filing a formal appeal (cost is $30) so you have recourse as a property owner after the appeals deadline on December 2 has passed. I cannot emphasize how important it is to know the distinction between these two forms. Please take a few minutes to watch the video below for more information. This can save you and your contacts money.
  5. Do you need help or not? If you have access to data (sales in particular) between January and March 2013, you can put together your own support for your property’s value. If you can do this, don’t hire anyone. The key is to put together something solid, honest and realistic (don’t lowball the Assessor). If you do not know how to support a value for your property, hire someone. Keep in mind that in most cases I strongly discourage a full appraisal because it’s just too much unnecessary information  unless the property is very complex.

I hope this was helpful for you personally or simply good information to make you a stronger asset and resource for your clients. Do keep me posted if you have any questions. Feel free to comment below and I’ll be sure to respond to you.

My Services: In case it’s relevant, I’ve assisted countless property owners during the tax appeal process over the past few years, and they’ve had profound success in reducing their property taxes. I’ve done quite a bit of work with typical “decline in value” situations, but also with escape assessments and other base-year value challenges. I don’t use a full appraisal because it’s not needed in most cases. Instead I developed a more limited custom valuation product that is amply informative, yet it only costs about 1/3 of what a full appraisal costs. You can check out my property tax website if you wish. Let’s talk more if you have any questions.

Watch a Tax Appeal Video: In case you’d rather listen to the content of this post, watch the video below (or here)

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Why is your recent purchase assessed so much higher than the purchase price?

I’ve been getting this question quite a bit lately. Home owners wonder sometimes why their assessed value is so much higher than the purchase price. It doesn’t make any sense, right? Well, let me share with you a scenario to explain why this happens sometimes. I spoke with a home owner this week, and his property is currently assessed at $350,000 despite the property being purchased in April 2012 for $200,000. Obviously this is a huge difference, and it’s highly inconvenient too since his tax bill is now $1,500+ higher than expected.

Why does this happen? When you purchase a property in the latter part of the first or second quarter of the year in Sacramento County, sometimes the Assessor is not able to reassess your property before the new assessments are published on  July 2. This means that even though you purchased at a much lower level (market value presumably), the Assessor’s value is not based on your new purchase because they couldn’t get the new data in the system before assessments were posted.

What should you do when this happens?

  1. Call the Assessor’s Office to discuss your situation.
  2. You’ll most likely be reassessed come October since The Assessor reviews purchases in the beginning of the year to catch errors like this (see points 5 & 6 though).
  3. You’ll be issued a refund if you overpaid on your property taxes.
  4. Don’t hire anyone to appeal your property taxes until you hear back from the Assessor. Why? Because this scenario above is most likely really just a logistical issue due to the time you purchased your property rather than blatant overassessment. Hopefully your property will be reassessed in October to a level more consistent with your purchase price.
  5. However, if the Assessor does think your property is worth the higher amount and you know that’s not the case, then it’s time to appeal.
  6. If you don’t hear from the Assessor’s office by mid-October or early November, let’s talk. Do not let the deadline to appeal on November 30, 2012 pass before you do something. If the deadline to appeal does pass though, keep in mind you have four years to appeal your base-year value (This is only for “base year” value situations. Most other property tax scenarios have much less time – only a matter of months).

While it can be really frustrating to be in this situation, I hope this was helpful to answer some of your questions. Feel free to contact me if you have any other questions or property tax appeal issues to discuss.

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